Facing stiff prison sentences for federal crimes, developer Morad “Ben” Neman and his brothers are suing a longtime investment partner, who they say stole from them over a 12-year period.

Morad and Hersel Neman, who pleaded guilty in December to federal tax-fraud and money-laundering charges, filed a lawsuit of their own in Superior Court in Los Angeles. They allege that despite “three decades of virtual brotherhood,” Saeed Farkhondehpour had engaged in a raft of deceptive practices related to a number of properties the group owned in Downtown and in Los Angeles County.

They claim Farkhondehpour was a self-dealer and a thief, commingling and misappropriating funds, according to the suit. A third Neman brother, Sion, is also named as a plaintiff.

The Nemans are seeking $40 million in losses and damages from Farkhondehpour, including unpaid management fees dating back to 2005.

The suit details the crumbling business partnership between Morad Neman and Farkhondehpour, who have known each other since 1978 when they were newly arrived teenagers from Iran.

They became roommates, business partners and “grew to be like brothers,” according to the suit. They began jointly buying and investing in properties around 1984 under the name, Investment Consultants, either to be co-owned or jointly owned with third-party investors.

The Nemans allege that Farkhondehpour’s dishonesty and poor work ethic led them to effectively dissolve Investment Consultants and enter an agreement where each party would retain their respective interests.

Farkhondehpour was to establish a management company to oversee all the properties and agreed to sell the properties when it was financially beneficial.

The suit claims Farkhondehpour held onto the properties, and rather than selling, collected excessive management fees. He did not give Morad Neman his fair share of the proceeds, and refused to provide detailed accounting books, the suit alleges.

Farkhondehpour failed to make full loan payments on the properties, the Nemans allege. They say their former partner would arrive in the office around noon and trade stocks or engage in “drug-related activities,” according to the lawsuit.

Last year, Morad Neman and Farkhondehpour entered into a mediation to resolve their disputes. They agreed to completely separate their interests in the properties so that none would be jointly owned. Farkhondehpour failed to abide by the agreement and has not executed conveyance to the Nemans, according to the suit.

Farkhondehpour said in an email to The Real Deal on Thursday that the three-member arbitration panel was preparing to issue their ruling when the Nemans filed their lawsuit. He denied all the allegations.

Morad “Ben” Neman pleaded guilty in December to tax-fraud changes while his Fashion District company admitted to laundering money that authorities allege was drug money. Combined, his Neman Real Estate Investments owns six properties with an estimated value of $81 million, according to Real Capital Analytics.